• Don’t discount technicals when analyzing Bitcoin. A look at the technicals driving BTC/USD
• MUFG: Tokyo’s potential verbal intervention & the impending Jackson Hole symposium
• Crude oil makes a comeback today. Settles at $81.25, up 1.07%
• Canadian home prices post second-largest increase ever
• Baker Hughes US oil rig count -5
• European equity close: A week to forget as FTSE 100 flirts with some dangerous levels
• No Grayscale vs SEC decision today
• The situation in China is starting to remind me of the US in 2008
• Fed poll: Half of economists see the Fed waiting until at least April before cutting rates
• Kickstart your forex trading day for Aug 18:A technical look at the EURUSD, USDJPY, GBPUSD
• Canada July PPI -2.7% y/y vs -5.5% prior
• The JPY is the strongest and the GBP is the weakest as the North American trading begins
• ForexLive European FX news wrap: Yields heavy, risk tones slump

There was no major news coming out of the Fed chatter. Most of the focus was on interest rates, and stocks. Bitcoin fell toward technical support. Crude oil prices rebounded off of low levels and closed higher on the day, but down on the week.

On Friday, if you were to look at the price changes of the major currency pairs outside the JPY and CHF, they were all within 0.11% of the prior close.

Looking at the changes of the major currencies vs each other, the JPY was the strongest. The CHF was the weakest. The rest had small net gains or losses vs each other with up and down volatility.

For the trading week, the USD is closing mostly higher helped by rising yields and safe haven flows into the USD on the back of China concerns. The only currency, the greenback lost value against was versus the GBP. (a modest -0.34% decline). The weakest currency was the AUD and NZD as China weighed most on those currencies.

Below are the % change of the USD for the week vs the major currencies:

• EUR, +0.68%
• JPY, +0.26%
• GBP, -0.34%
• CHF, +0.66%
• CAD, +0.80%
• AUD+ 1.36%
• NZD, +0.95%

The USD also rose vs the offshore yuan with the USD rising:

• CNH, +0.65%

Looking at rates, yields were lower today after gains earlier this week:

• 2-year 4.942%, -1.8 basis points
• 5-year yield 4.385%, -5.4 basis points
• 10-year yield 4.252% -5.5 basis points
• 30-year yield 4.375% -3.7 basis points

For the trading week:

• The 2-year yield moved to a high of 5.024% at the weeks high, which was about 4 pips short of it 2023 high yield of 5.085%. The yield did come off high levels but is still closing higher by around 4.4 basis points
• The 10-year yield traded 2 new 2023 highs of 4.328%. That pretty much equaled the high price going back to October 2022 at 4.335%. The yield rose by 9.5 basis points this week
• The 30-year yield rose to a high of 4.426%. Like the 10 year that more or less equaled the October 2022 high at 4.423%. For the week, the 30-year yield rose 11.0 basis points

Looking around other markets today to wrap up the trading week:

• Crude rose $0.22 or 0.27% at $80.62. For the trading week crude oil fell -3.09% and broke a 7 week up streak
• Gold fell to the lowest level since March this week. For the day, it is down $0.61 or -0.03% at $1899. For the trading week, the price fell $-24.06 or -1.26%
• Silver is trading up 4.7 cents or 0.21% at $22.73. For the week, the price is up a modest 0.25% or 6.6 cents
• Bitcoin is trading at $26,168 after reaching a low of $25,601. For the trading week, the price is down 11% or $-3116

in the US stock market today, the Dow snapped a 3 day decline but the S&P and NASDAQ index fell for the 4th consecutive day. Both the S&P and the NASDAQ closed lower for the 3rd consecutive week:

• Dow Industrial Average rose 25.83 points or 0.07% at 34500.67. For the trading week, the index fell -2.21%
• S&P index fell -0.65 points or -0.01% at 4369.72. For the trading week, the price fell -2.11%.
• NASDAQ index fell -26.17 points or -0.20% at 13290.77. For the trading week, the price index fell -2.59%.

Next week the highlight will be the Jackson Hole Summit with Fed chair Powell speaking on Friday, August 25 at 10:05 AM ET. Last year’s 8-minute speech was short and quick and effective as he outlined the hawkish Fed policy that took rates from 2.5% to the current level of 5.5%. The dollar index moved higher and peaked on September 28, before starting its rotation back to the downside.

Other key data next week includes:

• Flash PMI data out of Europe and the UK on Wednesday
• Flash PMI data out of the US also on Wednesday
• Weekly unemployment claims on Thursday
• German LIFO business climate data on Friday
• Final University of Michigan consumer sentiment index on Friday

Also of note next week is Nvidia will announce their earnings on Wednesday after the close. Given its shocking announcement last quarter (rise of forward guidance revenues to $11 billion from $7 billion estimate), the market will be watching what they announce and project for this quarter and going forward.

Thank you for your support this week. Hope you have a good weekend.

This article was written by Greg Michalowski at www.forexlive.com.

Monthly options expiration was likely a factor in trading today but, in any case, the dip buyers returned and stocks mounted a solid comeback, led by value.

• S&P 500 flat
• Nasdaq Comp -0.2%
• Russell 2000 +0.8%
• DJIA +0.1%
• Toronto TSX Comp +0.1%

On the week:

• S&P 500 -2.1%
• Nasdaq -2.6%
• DJIA -2.2%

This was the third week in a row of declines for the Nasdaq:

This article was written by Adam Button at www.forexlive.com.

The price of Bitcoin this week, finally cracked below its 100-day moving average (blue line in the chart below) for the 1st time since June 21. The price lows over the last few weeks have found support buyers leaning early against that 100-day moving average level, pushing the price back higher.

However, in trading yesterday the 100-average day moving average was broken at $28,538 (blue line in the chart below). The momentum continued with the price moving to – and through – the 200-day moving average at $27,291. That was the 1st break and close below the 200-day moving average since January 12, 2023 (PS. on March 10, the price tested that moving average line and bounced higher).

In trading today, the momentum continued to a low price of $25,600. That got within $23 of the 38.2% retracement target at $25,577. The price has since bounced back to $26,050.

So support held at the 38.2% retracement near $25,577.

What next?

Going forward, the 200 day moving average at $27,291 is now the key resistance level on the daily chart that if the price were to stay below keeps the sellers in play. A move above would be more bearish.

On the downside, a break below a 38.2% retracement and swing area support down to $24,819 would be targeted (see yellow area in the chart below)

This article was written by Greg Michalowski at www.forexlive.com.

Amidst fluctuating global currencies, MUFG delves into the potential for verbal intervention from Japanese officials, especially as the Jackson Hole Symposium approaches, which may carry significant implications from Chairman Powell’s stance.

Key Observations:

1. USD/JPY Surge: There’s been a noteworthy increase in the USD/JPY rate since the Bank of Japan’s (BoJ) policy meeting in July. This uptick is reminiscent of the scenario leading to intervention in the September-October period last year.

2. Intervention Alert Scale: By analyzing previous Japanese language comments linked to past interventions, MUFG’s Tokyo team developed an „Alert Scale.“ Based on this 1-8 scale, the current situation is assessed at about level 6. This suggests that the urgency hasn’t reached the zenith that typically precedes actual interventions.

3. Upcoming Jackson Hole Symposium: Given the proximity of the Jackson Hole meeting, it’s anticipated that Tokyo may escalate its rhetoric. If Chairman Powell delivers a hawkish speech, it could pose challenges for Japan’s monetary stance.

Implications:

• Balancing Act for Japan: Japanese officials are in a tight spot, striving to regulate JGB yields while concurrently curbing JPY’s depreciation. If the USD continues its upward trajectory in the coming week, Tokyo might have to recalibrate its approach.

• Potential Responses: In the event of further escalation of the dollar next week, Japan could react by allowing an uptick in JGB yields, particularly if US yields also rise. This move might be paired with amplified rhetoric. The trajectory of USD/CNY, influenced by PBoC fixings, will also be crucial, as its recent downward correction has acted as a ceiling for USD/JPY.

Conclusion: MUFG underscores Tokyo’s potential for heightened verbal interventions, especially with the Jackson Hole Symposium on the horizon. Depending on Chairman Powell’s remarks, Japan may need to make pivotal decisions, particularly in balancing its yield and currency objectives.

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This article was written by Adam Button at www.forexlive.com.

Headlines:

• Trouble begins to brew for stocks again
• Treasury yields feel heavy towards the end of the week
• Bond bulls make a bit of a stand for now
• USD/JPY eyes back-to-back down days as upside momentum stalls
• UK July retail sales -1.2% vs -0.5% m/m expected
• Eurozone July final CPI +5.3% vs +5.3% y/y prelim

Markets:

• JPY leads, GBP lags on the day
• European equities lower; S&P 500 futures down 0.5%
• US 10-year yields down 5.7 bps to 4.223%
• Gold up 0.2% to $1,892.90
• WTI crude down 0.5% to $79.98
• Bitcoin down 4.2% to $26,479

It all started with bonds being more bid as the bulls are making a bit of a stand since yesterday. 10-year yields in the US clipped 4.30% then and tested the high from October last year but are seen falling back all the way to 4.22% currently.

That did not trigger much significant moves in markets early on but things are now picking up as we move towards US trading.

Once again, stocks just can’t get off the floor as sentiment worsened akin to a more risk-off wave. US futures were dragged lower with tech shares leading the downside while European indices are now pushing 1% losses across the board.

USD/JPY was softer earlier on but stuck around 145.30-40 levels for the most part during the session, even with the developments in the bond market and equities.

But the dollar itself is finding a light bid now amid the softer risk tones, though it is just holding a light advance against the pound, franc, and aussie mostly. Speaking of the pound, UK retail sales data disappointed once again and that is a bit trigger for offers as well during the session. GBP/USD is down 0.3% to 1.2705 currently.

It’s now over to Wall Street to make do with the negative sentiment in markets. The theme as of late tends to be late selling in risk, but what will traders and investors do now when risk is already turning ugly ahead of the open for once?

This article was written by Justin Low at www.forexlive.com.

Equities are extending losses on the session now with US futures continuing to dribble lower. S&P 500 futures are now down 0.4% with Nasdaq futures down 0.7% and Dow futures down 0.3% on the day.

On the surface, with bond yields tracking lower today, it looks like a risk-off wave is hitting markets. But I want to say that the bid in bonds appear to be more of a coincidence – at least in part – considering we saw 10-year yields in the US testing the key 4.30% mark yesterday.

Sure, China worries are a legitimate concern and I acknowledged the risks to that here. But whatever the case might be, this is not a good look for equities whatsoever. If higher bond yields were weighing on sentiment before, lower bond yields as a result of global economic worries are also not supportive. Then, what else is there to work with for stocks at the moment?

In FX, the dollar is starting to inch ahead as well as it pushes to the highs for the day – even though the changes are still relatively minor. EUR/USD is down 0.1% to 1.0860 while GBP/USD is down 0.3% to 1.2705. The aussie is also at the lows for the day now, down 0.3% to 0.6385 against the greenback.

This article was written by Justin Low at www.forexlive.com.

It looked like the bond market rout was going to extend at some point yesterday but the bulls are putting up quite a bit of fight at the first key test. 10-year Treasury yields hit 4.30%, which is a critical juncture on the charts, and so far that level is holding.

In the context of the rise in yields since last week, this isn’t much but it is already undoing the moves higher on Wednesday and Thursday this week.

It is but the first test of the 4.30% mark, so I’d caution against early thinking that this is where the bond market turns around.

Economic concerns continue to linger, especially from China, but bond traders have braved past that for many days already now. I can’t quite see how all of a sudden it becomes the main issue for a turnaround in sentiment. Not least when there is still plenty of talk about the waves of supply in Treasuries, which quietly might be the driving factor behind the move higher in yields since last month.

In any case, this continues to be the place to watch as we approach the end of the week. So far, it hasn’t quite have much reverberations to broader markets though. The dollar is mostly steadier and keeping mixed/little changed while equities are still slumping regardless, with US futures down on the day and pinning European indices lower as well.

This article was written by Justin Low at www.forexlive.com.

The Fed
is waiting for the totality of the data to be released before deciding what to
do at their September meeting. As of now, the data supports the soft-landing
narrative as the disinflation in the core measures
continues but the strength in the labour market and consumer spending might
keep inflation higher for longer. This is something that might translate into
more rate hikes or a “higher for longer-er” stance. Recently the long-term
Treasury yields have been rising non-stop and this has benefited the US Dollar
but the reason for such a rally is still unclear.

On the other hand, the BoJ kept everything unchanged as expected but implicitly tweaked
the YCC policy keeping the target band unchanged but giving more flexibility
with a hard cap at 1.00%. So, they basically widened the YCC band without
stating it explicitly. This has created lots of volatility in the JPY, but
eventually led to a fast depreciation. The BoJ has also already intervened
twice to smooth the rise in yields ultimately weighing on the JPY. Today, the Japanese CPI data surprised to the upside with
the core-core reading rising further.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY broke above the previous high at the 145.00 handle and the breakout
might point to a rally towards the 150.00 level. We recently retested the resistance turned support and what
happens next will decide if we go higher or lower as a fall back below the
145.00 handle should point to a deeper pullback. Note also that the
145.00-150.00 range is considered the “intervention territory” for the BoJ.

USDJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
recently fell below the red 21 moving average which
was acting as a great dynamic support. Maybe it’s an early sign of reversal? If
the price falls below the 145.00 handle, the sellers should start to look
forward to it and take the price into the 142.00 handle. We can also notice
that we’ve been diverging with the
MACD and this
is generally a sign of weakening momentum often followed by pullbacks or
reversals.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price has bounced near the 145.00 support and
it’s now approaching a strong short-term resistance around the 145.60 level
where we have the confluence with
the previous swing low level, the 38.2% Fibonacci
retracement level and the red 21 moving average. We
can expect the sellers piling in here with a defined risk above the resistance
and target the 142.00 handle. The buyers, on the other hand, will need the
price to break above the resistance to pile in and extend the rally towards new
highs.

This article was written by FL Contributors at www.forexlive.com.

The Fed
is waiting for the totality of the data to be released before deciding what to
do at their September meeting. As of now, the data supports the soft-landing
narrative as the disinflation in the core measures
continues but the strength in the labour market and consumer spending might
keep inflation higher for longer. This is something that might translate into
more rate hikes or a “higher for longer-er” stance. Recently the long-term
Treasury yields have been rising non-stop and this has benefited the US Dollar
but the reason for such a rally is still unclear.

The RBNZ, on the other hand, kept its official cash
rate unchanged while stating that it will remain at the restrictive level for
the foreseeable future to ensure that inflation comes down back to target. The
recent New Zealand inflation and employment data surprised to the upside but
the PMIs are in contraction with the Services PMI this week plunging into
contraction. The wage growth has also missed expectations and it’s something
that the central banks are watching closely for second round effects.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD just
keeps on falling with very shallow pullbacks. The breakout of the 0.5987 low
has also opened the door for a fall into the 2022 low at 0.5514. The pair
remains in a “sell on rallies” mode as the trend is clearly bearish with the
price printing lower lows and lower highs and the moving averages crossed
to the downside.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we’ve been diverging with the
MACD for a
while which is a sign of weakening momentum often followed by pullbacks or
reversals. In this case, if we get a pullback, there will be a strong resistance at the
previous support turned resistance where we
can also find the trendline and
38.2% Fibonacci retracement level.
This is where the sellers are likely to pile in with a defined risk above the
trendline and target the 0.5514 low.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a divergence even on this shorter timeframe as the pair becomes more and
more oversold. The resistance is highlighted by the blue zone and the buyers
will need to break above it and extend the rally past the trendline to have
more conviction for a return towards the highs.

This article was written by FL Contributors at www.forexlive.com.

The pair is now up 0.1% to 0.6430 and well off the earlier lows of 0.6365 today. It comes alongside a bounce in the Chinese yuan, after this particular headline here. The offshore yuan has strengthened from 7.34 to 7.30 against the dollar and that is helping with sentiment in the aussie. A steadier risk mood is also helping somewhat on the day with US futures keeping gains of roughly 0.2% currently.

Despite the bounce, the technicals are still not looking bright for AUD/USD. The pair has been on a losing streak over the past seven days and it just vindicates the poor August seasonality that we have been accustomed to.

There’s still no real turnaround in the downside momentum just yet and it will take more on the part of buyers to try and turn things around. The May low at 0.6458 and 100-hour moving average at 0.6465 are the points to watch in case buyers do make an attempt.

However, with the fundamental outline still not looking favourable, the path of least resistance should be lower for the aussie especially if bond yields are able to keep higher for the time being. That suggests that the bounce here should be faded, with the technical resistance levels above being better spots to build on shorts.

This article was written by Justin Low at www.forexlive.com.